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NEW DELHI, Jan. 25

THE Union Government plans to wrap up the strategic sale of 26 per cent of its equity in Indian Petrochemicals Corporation Ltd (IPCL) to a strategic partner by February-end.

The qualified bidders — Reliance Industries Ltd, Indian Oil Corporation and Nirma Industries — are currently conducting due-diligence, expected to be completed by the end of the month.

The Ministry of Disinvestment will hold a pre-bid conference of the bidders in the first week of February to discuss the draft shareholders agreement. "By mid-February, we plan to approach the Cabinet Committee on Disinvestment seeking its approval to invite price bids for the IPCL stake," Government sources said.

The Ministry has put IPCL's disinvestment process on the fast track after the CCD cleared a revised plan last November to sell the Government's equity.

According to the CCD's decision, the Union Government will sell 51 per cent of its equity in IPCL in two stages. In the first stage, it will offload 26 per cent of its equity along with transfer of management control to a strategic buyer. Following the strategic sale, the Government will sell another 25 per cent of its equity, taking the total equity that will be divested to 51 per cent.

The Government currently holds 59.9 per cent equity in IPCL. The remaining equity is held by banks, financial institutions and the public. In the second round of the disinvestment plan, the Government proposes to sell 25 per cent of its stake in tranches of 10 per cent or less every year till the 25 per cent limit is attained in a timeframe of three years.

The remaining 25 per cent equity will be sold either in the market or by giving the first right of refusal to the strategic buyer who was successful in the first round, the sources said.

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